Saturday, 26 September 2015

Linkage

There aren’t 165 human biases. There are 165 deviations from the wrong model.

This reminds me of something Werner Güth said to me once: "I saw so many papers coming out with stories of inequality, betrayal aversion etc. that I decided to cultivate aversion aversion."

He then added a typically profound and provocative aside, that much later, he had realised that risk aversion was equally problematic. His point, I think, was that the concept of risk aversion, which is absolutely mainstream microeconomics, is itself a sticking plaster over our failure to come up with good descriptions of human decision-making.